Tesla’s CEO, Elon Musk, announced a decisive move on Thursday, revealing plans for an immediate shareholder vote to relocate the company’s state of incorporation from Delaware to Texas. This bold decision comes hot on the heels of a setback in Delaware, where the chancellor dismissed Musk’s proposed $55 billion pay package for Tesla.
Musk’s Texas Rally on Social Media
In a flurry of posts on X, formerly known as Twitter, Musk expressed regret over incorporating Tesla in Delaware. He cautioned his followers against doing the same and suggested Nevada or Texas as preferable alternatives. Initiating a poll, Musk asked his followers to weigh in on relocating Tesla’s state of incorporation to Texas, where its headquarters are situated. The response was overwhelming, with over 1 million votes cast, of which more than 87% favored the move.
Galvanized by Support: Musk’s Swift Action
Buoyed by the resounding support, Musk wasted no time in announcing his intention to conduct a shareholder vote to shift Tesla’s incorporation to the Lone Star State. In an early Thursday morning post, Musk declared, “The public vote is unequivocally in favor of Texas! Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas.”
Musk Wants Investor Vote To Move Tesla From Delaware To Texas: Setback in Delaware Court
This move coincides with Chancellor Kathaleen St. J. McCormick’s ruling against Musk’s proposed pay package for Tesla. Chancellor McCormick highlighted Musk’s control over the process, noting last-minute alterations to the plan during crucial board meetings. The package, in development since 2018, faced opposition from shareholders, leading to a trial in November 2022.
The Trial Drama: Musk Wants Investor Vote To Move Tesla From Delaware To Texas
At the heart of the trial was Tesla’s 10-year compensation scheme for Musk, featuring 12 performance milestones. These milestones were crucial for Musk to qualify for a portion of the package, estimated to be as high as $56 billion. Tesla argued that the plan aimed to incentivize Musk with equity awards for achieving ambitious goals, emphasizing the absence of hourly work requirements.
No Immediate Response from Musk or Tesla
As the news of Musk’s Texas move reverberates, representatives for Musk and Tesla have yet to comment on the development. The stage is set for a pivotal shareholder vote that could potentially reshape Tesla’s corporate landscape.
